KARACHI: The cotton market remained steady on Wednesday amid sporadic buying for new crop. Overall the undertone was steady while near future outlook uncertain.

Falling world cotton prices have started to impact the domestic market where most of the deals were finalised at lower rates. It is interesting to note that buyers are keen in lifting the new crop cotton though sizeable stocks of old crop are still lying with ginners.

Due to acute shortage of irrigation water, cotton sowing in Sindh – particularly lower part of the province – remained low. Only 48 per cent area has been sown against the June 1, 2018 target, indicating a decrease of 36.6pc over the previous year.

Meanwhile conflicting reports are coming from Punjab with some suggesting that up to 95pc sowing has been done so far while others implying the situation is not encouraging despite scattered rains.

Brokers believe the flow of phutti (seed cotton) would improve in coming days because cotton sowing in upper Sindh was fairly good. Consequently, around 1,200 bales deals were reported to have transpired.

New crop deals from Tando Adam, Shahdadpur and Sanghar were finalised between Rs7,800 to Rs8,000 per maund while phutti (seed cotton) prices were quoted in the range of Rs3,900 to Rs4,000 per 40kg.

Strong demand for yarn also worked as an impetus for spinners who readily picked up new crop deals.

The world leading cotton market remained under pressure due to rising tensions between the United States and China over tariffs. New York cotton closed lower by up to US 4 cents while the Chinese and Indian markets also closed easy.

The Karachi Cotton Association (KCA) left its spot rates steady at overnight level.

The official reports quoted a deal of 400 bales from old crop from Rahimyar Khan were done at Rs7,600 per maund.

Published in Dawn, June 21st, 2018